Making a dent in vehicle service contracts

It was 2004, and Troy Good and his team had just finished performing a paintless dent repair before an audience of nearly 100 Chrysler employees. He hoped they had done well. They had. The crowd erupted into a standing ovation.

That was the day Good, founder of Dent Zone, sealed his first service contract deal with an automaker. The paintless dent repair product his Texas company agreed to private-label for Chrysler was Auto Appearance Care.

"When we were introducing it to the F&I departments, they didn't understand exactly what paintless dent repair was, and so in the early years, [demonstrations were] what we had to do," Good told Automotive News. "We had our technicians do a lot of demonstrations. Nobody knew about it; nobody had any history."

Showing people was essential to getting them to understand that the process was a viable, noninvasive alternative to body shop repairs, which require more downtime, added Jeff Beaver, senior vice president of marketing and product management at Nobilis Group.

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Good: “Nobody knew about it.”

A realization

Good, who established Dent Zone in 1991, is now CEO of Nobilis, which was formed in January 2017 to parent Dent Zone, its AutoBodyGuard appearance protection unit and its PDR LINX unit, which provides catastrophic services such as hail repair, fire and flood mitigation and removal of paint overspray or other airborne particulates from clear-coated vehicle surfaces.

When Good entered the realm of paintless dent repair in the early '90s, he focused primarily on addressing hail damage and building a national network of technicians qualified to handle the process. At the time, there were probably around 150 technicians who could perform paintless dent repairs, Good said.

But after more than a decade of partnering with body shops for hail damage repairs, Good came to a realization: Why not incorporate paintless dent repair coverage into a service contract, giving dealership F&I departments a new product to sell?

"It took a couple years to get some underwriting behind us," Good said. "We had to get a lot of underwriters to understand what we were doing in the actual claims."

Finally, though, the company was able to capture data used in actuary analyses to determine elements such as loss experience, loss frequency and severity of a claim.

"The PDR service contract became more commonly accepted once we had the underwriters behind us, and we partnered with over 20 channel partners, including OEMs and third-party administrators at that time," Good said.

Arch Insurance Group was the first company to underwrite a paintless dent repair service contract program, largely on the recommendation of Glenn Ballew, the company's senior vice president. Getting someone like Ballew, from a reputable insurance company, behind the paintless dent repair service contract was key to getting underwriters to understand the product was viable, Beaver said.

'We had to be smart'

Aside from finding underwriting partners and launching administrative support, Good and his team were tasked with establishing an efficient claims management process. "That was a big goal of ours, to actually create our own proprietary management dispatch platform," he said.

Eventually, he created a system that would manage inbound claims, tech dispatch, customer coordination and communication with the dealership.

"While I was excited about the prospects and the growth potential opening up a new product category like this, we knew that we had to be smart," Good said.

The planning and hard work paid off. Today, Nobilis manages nearly 1 million contracts combined for auto retailers, manufacturers, F&I administrators and independent agents that have partnered with the company on protection programs offered to their dealer accounts, Beaver said.

The vast majority of accounts are from franchised new-car dealers, such as those with AutoNation, Group 1 Automotive and Berkshire Hathaway Automotive and those involved in manufacturer programs, such as the first one set up for Chrysler, Beaver said